tv Street Signs CNBC April 11, 2014 2:00pm-3:01pm EDT
in the s&p 500. the top winners are allergy again, gill adsciences, and c.h. robinson. so there is some green out there, ty, just not a lot down here on the floor. >> i think c.h. robinson might have been the only one higher. that will do it for this week of "power lunch." have a great week gent. "streets signs" begins now. slg. the question is who will be brave enough to hold on to stocks over the weekend? the public can finally buy google glass -- well, for one day, anyway. what is the bonds market telling us that we really do not want to hear.
since brian is out today, scott wapner will be joining us. there's a whole pile of action going out there in the market. >> and we're watching it from down here, the scene of the crime, if you will, the nasdaq, russell 2000, ever edging closer and the ten-year yield is critical. i know we'll talk about it more, as we go through this hour more, at 262 and falling. so it is a point certainly to watch. it seems as though stocks are tracking what yields are doing. let's get to our market reporters, by the way. bob pisani is here. seemo mody is at the nasdaq. bob, kick it off. how would you describe the action today? >> i would say it's tense tiff. certainly sectors were doing fine. the key is watching the interest rate situation. so here we are, essentially at the lows for the day.
essentially at the lows. if you want to know the markets here, you watch interest rates. put up the ten-year yield. it's the ten-year drifted lower in the middle of the day, generally the markets move to the down side. that's what -- i just want to point out the way stocks have moved in the last year. look at some of these. northr northrop grumman, and now it's at 117, and people are concerned about it. look at it in perspective. united tech snoolgs, $80 this time last year, it goes up to $115, $116, it's $2 off that and people get concerned. i think you have to look longer term. delta goad from $10 to $34, and is $2 off of that. just keep it in perspective. i've heard the world metdown before, i don't understand why people are using it. scotty, the point here, put/cal
ratio right now 1.5. 1 1/2 puts for calls, that's extremely high. that's been associated market bottoms for the past. i've been pointing out the strength in the old-school tech stocks, the industrial stocks generally holding up well. i start -- if i see northrop grumman melton down, i start worrying. i still don't see it. it's not that i don't care. i'm trying to watch the whole market. >> what's interesting is i've got my hands on a error from a brokerage firm today on where the flow was going in the most-talked about names that we've all been talking about. over the last three days, you're starting to get as much covering of shorts as you are stepping on the shorts. it just giving you an idea. i'm talking about twitter has high short interest, as does amazon, but you are getting some covering of some of the short activities in the names you talked about and the ones we've been talking about almost every day. >> heavy shorting at etf shares
that have to be bought back. the biotechs heavily shorted, the xlk, and etfs also heavily shorted, represents shares that have to be bought back. seema mody, what do you see there? >> erratic trading behavior, that's how one pro summed up today's trades. we may not be sitting on big gains or losses, but we are seeing a lot of volatility, specifically in the momentum names, the high-flying tech stocks currently trading lower, social media and internet stocks currently under pressure. when the market is exceptionally volatile, it brings investors back to earnings and valuations support. those are two components that investors are talking about when they look at they momentum stocks. we've been talking about this internal rotation out of the new tech into more old cap, tech names that have defensive properties. a lot of those names are trading lower today, so that doesn't seem to be the case today, in terms of where we have some bright spots, take a look at boy
tech, specifically the large-cap biotech nails. gill -- the nasdaq -- scott and mandy? >> thank you very much. inch by inch, getting closer to correction territory, which would be defined as a 10% correction or 10% to the down side or more. so our question is, is it time to back out of new tech names and get back into blue-chip best bets? joining us is tech guru andy kessler. is that a strategy you could deploy? >> i think it is near term. momo is now a no-no. the momentum names got driven up. some say it bond by until tesla and bitcoin are back to $100, i'm not sure about that being the case, but clearly these
names were over-owned. it was hard to find a hedge fund that didn't own yelp, for god's sake, so going back to 60 is these -- and i think we're getting closer to the end than the beginning. >> but there's someone who disagrees with you, admittedly someone who was pessimistic. he said that some of they techs are basically in cuckoo land with regard to their valuations, some of them haven't gotten any earnings. he thinks that could be one of the reasons why we could see an '87-like crash in the next few months. do you debuvg that completely, andy? >> yeah, i don't believe that at all. again, you've got to watch the momentum guys. there was a slow rice, and hedge funds moved quick. like i said, facebook and yelp and tesla, priceline, these things were just over-owned. what you will hear over the next
probably few weeks are the hedge funds rebalancing. we have redemptions, or we're getting out of these names, and they're just going to be blowing them out. unlike last time in the dot-com era, there are underlying earnings at a lot of these companies, but they god bid up to fantasyland. what i would do is look under the covers of these companies. what are these companies with all this cash buying to build out their infrastructure? that's where the next set of returns will be, the market will rotate into. >> herb, part of the problem is, as some of these companies have come back to earth, as andy says, you still aren't seeing any buyers ready to pile into any of these names. >> what are you supposed to do? look, there's an interesting comment from peter atwater. he reminded me, said price declines always start with the most extreme case and work backwards. he said this reminds him of housing in 2005, and tech in 2000. so, you know, you have to
sometimes think we just -- by the way, scott, the data you saw on people coming in shorting right now would sort of confirm that. >> are you saying there were no natural buyers out there for the momentum stocks, herb? >> well, what i'm saying -- i said it yesterday and i did work and came back with more information. if you go back the last three months, and with tesla as the exception, because tesla is still up 39% for the past three months, it's down 13% for the past month, but if you look at a lot of other heavily shorted names, man, they are getting clobbered over the three-month period, which tells me if the shorts are squeezed out, there were no natural buyers. you know, the list is 3-d systems, conn, herbalife, a bunch of them big momentum names that people just owned to own them. >> yeah, andy, why don't you think the trend of this old tech, whether it's an intel or a cisco or ibm or microsoft, some
of the stocks that have been holding up better in thes face of the selling we've seen will hold up and carry forward. >> because they didn't get bid up in the first place. the metaphor was just a year and a half, apple was $700, and every hedge fund and it rolled over a bit and landed at $4, and everybody said it was going to $200, now it's back to 520, 550. the buyers come in when the value on the companies put a floor under it. i don't think hp is going to lead this market higher, i don't think cisco is going to lead it higher. what you want to do is take a new device, a galaxy f-5, rip it apart. find companies, find all the parts that are in there. that's what the next waive is. >> and can you give us some of those names?
you know, they have lots of new chips, who are the makers of those parts? what particular companies are you talking about? >> i don't recommend stocks, but you can look at the names, and maxim, l lattice, and that's this one device. wait until the iphone 6 that comes out. many will rip it apart and you can find the parts in there. do the same thing with facebook o. salesforce or box. find out what kind of equipment they're buying, what kind of wifi is being put in place across the country. you'll find the next wave of winners. i don't think it will be yelp coming back and doubling again. rather than the companies that have worked or this old tech. >> herb, i guess the point you are making is take gilead, for example, one of the stocks that's been in the news as of
late. it's getting a pop today, but your suggestion is that it's nothing more than short covering that is lifting a stock like that, so therefore it doesn't have any backbone behind it, if you will, to keep a stock like that from rising, and lead you to believe that a bottom, so to speak, is in? >> well, scott, that's an interpretation, and that's something you can assume, but we don't really know. that's the point here. >> but it's no different, herb, than maybe some of the way some people would look at a market day where you get a bounce and it's just short covering. it doesn't have the backup to it, to lead you to believe it's something substantial. >> right, you don't know. i've got to tell you something very interesting. throughout all of this, look at warren buffett. remember back a few months ago he was considered a has-been. i remember sitting at my desk at
"the san francisco chronicle" saying this is just nuts, and buffett goes and buys dairy queen. i thought to myself, my goodness, it was so brilliant, because it was putting reality back in the world. he was paying attention to all the stuff that really mattered, not to all the fluff. the point of that is, in this market, you watch what's going on, it's going to do what it's going to do. i've been saling that a long time, and andy agrees with me, i know. >> anything you need to know about herb, dairy queen is reality rather than the next wave of technology. >> you said it, but yeah, you're right, herb. we're getting rid of the fluff and getting back to reality. this market is puttic a little dairy queen into the situation. in fact the weekend is getting closer and closer. right now we're going to talk about the safety trade. are indeed bonds your best bets? >> plus gap's big sales slump.
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as well. >> judge, you nailed it. first term you have is a two-week chart linking together the nasdaq indeck. look at the wonderful correlation, but i can pick anything. not that the world correlations are in systemic meltdown mode, they're not, but certainly key ones are highly correlated. we're down about four basis points on the day, but here's the neat thing, action you look at that two-week chart. we had an auction this week, wednesdays at ten. that was the same place we closed last week, boy, thing about that. 12 basis points, winner, he had a heck of a week if you're long. i will continue to say that the long is going to give you, in my opinion, the best gauge of the economic horsepower we have to look forward to. >> a lot of people are saying 30 years is a good proxy. let's bring in jim by aungo, do you feel that the bond market is
tell us, often even telling the phet that the economic is weaker than expected? >> yeah. if you were to look at the yield curve, which is probably the big indicator of what the economy is doing, it's flattening why a bit, because the fed is tapering, and it's going to potential push of short rates. not now, did you at some point in the future. the long end is rallying. the typical interpretation of that is that the economy is slowing. it's not very flat, but it's moving in that direction, it's slowing, and that is the word. i know that's not what the fed wants to hear now as they're trying to get out of the kuwait at a timive ease. >> so all the curve continuing to flatten, you reckon it will still by a problem for stocks? >> yes, as long rates come down, they'll probably come down because it's a safety trade to push money into long rates and will continue to be a big flash
red sign that says economic is slowing, and as we go into earnings season, that's not going to sit well with the asset markets. >> the other side of this, jim, of course is that the s&p is not that far away from its highs, right? there still is a considerable argument between bulls and bears in the market to what the economy actually is doing. there's a sizable group that thinks the economy is improving, and the data of late would lead you to believe that that's where things are going, that the movement we're seeing in interest rates and into bonds is fear out of the stock market going down and having a correction. more son than the economic. >> ire absolutely right. the stock market is 4%, 3.5% off its high, not 10% or 20% off its high. so it's not been a serious correction to date. as far as the economy goes, when you put that into context, the weather's gotten nice, we all know there will be an economic
rebound, so that's not shocking. when you net it against the weakness that we saw over the winter because of weather, the fear is the economy is still kind of stuck in the mud. it's really not doing a lot. you know, no one is happy when you get a c-minus, but you didn't fail. that's what we're fearing is what the economic will do. after a 30% rise in the stock market last year, in the hopes that it would lead to big earnings this year, to have the economic kind of stuck is not going to sit well. >> give us an a-plus strategy for playing the bond market, jim. >> middle of the curve. it will give you less risk like the five-year and seven-year note, less risk, but you're far enough from the front end of the curve which would get hurt. >> jim bianco, thank you.
thank you. rates a huge part of the housing puzzle today. a, i know you are watching this closely. >> absolutely. it's the up side to the downturn in the stock market if you're a consumer, as investors head to the safeties of bonds. in fact, just yesterday the average rate on the conforming lone went from around 4.5 to 4.375 to the average borrower, even as low as 4.25 for the best borrowers. that's the lowest in over a month. the bigger question is how long will we see rates this low. as the phet tapers its way into now, some of the experts out there. say we need to continue a large setoff like this to see rates move much lower, and dan green at the mortgage reports.com says
rates are still subject to what he calls event risks, either geopolitical or the economy here at home, and rates could call into the 3% range or go as high as 5%. we did see mortgage volume fall off dramatically at wells faro and j.p. mogen chase, as they move away from mortgage we're not going to see a bump up in that at all, but when we see the housing market, can we expect to see a move on rates? the housing market is a today is less about -- than it is there's just not that much to buy on spring. back to you. >> it certainly looks lie spring out there. coming up next, smoke 'em if you've got them. while this volatile week has investors piling into great stocks. later a social security
nightmare, how a screwup to leave you on the hook and your tax return slashed. we are at the lows of the day on the dow and the s&p. by the way, the nasdaq is looking to be down for the third straight week. we're back after this. [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade.
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welcome back to "street signs" if you're looking for the worst-performing stocks, just check out what's happening with the consumer discretionary sector. it's the biggest decline. the s&p off by about bush l brands, which owns victoria's secret, and urban outfitters, eek the luxury side, michael kors, it's worth noting that j.c. penney they're not in the s&p 500 anymore, but the worst-performing stock in the midhappened s&p 4 hubz. that makes j.c. penney down 15% so far to date. back over to you. thank you very much. dom. investors are turning 5r7 from consumer discretionary, they're piling into consumer staples. you still have to buy soap,
toothpaste, and the classic memt they'll do better than the rest of the market during times, and we've certainly seen that. you've seen that over the last three months. if you look at the s&p 500 versus one of the staple etfs you have started to see this reversal. if you break that down even further, it's interesting to see the action, because tobacco stocks have been doing the best. >> why is that? >> a few reasons why. when it comes to tobacco, janelle yellen this week emphasizing low rates. we got that message. toe batto stocks do well in a low rates environment. so you have that. there's a lot of talk of m & a heating up in that sector. >> speculation -- >> about american, and reynolds. then the s&p 500, they're also relatively cheap compared to the others, because they had underperformed on talk of higher
interest rates. so you have tobacco working, some of food stocks also working, and household products. another reason they're looking a bit invogue right now they got beat up dural the emerging markets turmoil, because a lot of the companies were looking to the emerging world for growth. now that that's doing better, some of those companies are looking more appealing for investors as well. overall when you're in this downturn environment, this is the play you want to be. >> you look for safety and defensive positions. over to you, scotty. >> mandy, thank you very much. gap a big loser this morning. courtney reagan, what's your read here? >> reporter: you know, i think that gap is stumbling a bit. remember the february same-store sales were also fairly disappointing. they had a vacancy in the merchandising lead role back in
november. that's when some of this merchandise was set. so i have to tell you some of it was just not as exciting a potential it can't have been, but traffic is an issue for gap, as well as other retailers. i do not think weather was an excuse this time. we know how tough it was. when you don't have foot traffic in the mall, you don't have foot traffic in gap stores, and that was a problem, combine it with uninspire merchandise, you have yourself an issue. right now, it's stumbling a bit. >> talking terry lundgren today as well, right? >> i did. i did. >> terry lundgren this morning here. >> so i'm curious, to the sentiment that he shared with you, and what it leads you to believe tows retailer expecting it to go. >> you've got a lot of optimism, but probably for a very good reason. you've got a lot of analysts on the street buying into what terry is selling, both from an
investment thesis standpoint and what he has going in the stores. terry was pretty optimistic. he has reason to be. he had a much better 2013 than many of the other retailers good. we don't exactly now how the first quarter has gone for macy's. he hinted when the weather turned, things did start to pick up. so we at least got that much out of him. >> courtney, thank you so much. good things come in fives here. up next, the five biggest and baddest stock in bear market territory. >> also, let's look at the nasdaq, currently down by 43 points, i think the absolute low was down by nearly 47 points. it's really only a handful of names countrily in the green. we'll also be talking about various other facets of the market going into the close. do stay with us right here on "street signs" on cnbc.
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in a down market the target price it $35. potential up side of 25%. this call is after two downgrades, but remember, this stock yesterday-ish lost almost half of its value. so, again, a downgrade coming. it's a pretty good upside move. >> let's move along. it is hub group. a strong back from raymond james. >> you're talking about $50, potential up side of about 25%. hub group is transportation logistics and management. they do things like trucking. they manage people's capacity for things like railcars. >> completely different from grub hub. >> completely different. they're saying -- >> earlier on in the show, with andy kessler, we were talking about getting out of the new tech names that having
slaughters into the old tech. cisco has initiated, even in the midst of security problems we've been talking about from the heartbleed. >> absolutely. this company's revenue is also down, but suntrust's target is about $27, so you have this idea that maybe there's an opportunity to buy shares now, given some of the turmoil that's happening, at least those analysts over there think so. >> conoco phillips, at morgan stanley. >> conoco phillips, old world, right? energy. they do more exploration, now that it's been -- well, this company here, $85, that's a target price of about 20% upside move. remember, this comes a day after they had comments about how they think assets of their shale oil will be better than they thought they would be, a nice move for conoco, following up on bullish comments from the company yesterday. stick around, dom. shares of ford are a tad higher
today as deutsche bank upgrades to a buy, citing the cost competitives in of the f-150 trucks. so the question is whether or not is it good time to get in. ryan dietrich on the fundamentals ron dotten, gentlemen, happy friday to you. ryan, what's the chart at ford tell you. >> we still don't like it. taking a look at the first chart. they recently had trouble. a die demarcation between bull and bears. that else it you the bears are still in control. what i really like, on this longer-term chart, it's been significant before, back in to 10, 2011, support, late 2012 there was support, so recently that resistance is a big thing. the 200-day is starting to roll over. it was pointing higher, that was a clear sign the bulls were in
clear. the momentum is clearly slowing. i think it could underperform. >> that's the longer-term trend line. that's a significant hurdle, but ron it's not always about what happens with the charts, but about the fundamental business. we know that morgan stanley doesn't like gm so much anymore, what's the story with ford? >> well, we would be neutral on the name. in terms of valuation, it's everything that you'd like to see, very low pes. our issue is really that they're spending cash through cap ex, and their roic, return on invested cash is basically lower than the market's average. so it's really a function of how well they do with those new investments, really unproven in terms of the track report relative to the s&p, so we would be really neutral at this point. >> neutral on the fundamental side, and do not like it on the technical side.
by sure to check out the online edition of "talking numbers" as well. if you think the nasdaq sell-off is a bit of a popping of the tech bubble, think again, at least if you look at this headline. they're making an eye-popping buy. on the phone right now with this news. if my information is correct here, he's buying another 10% stake, to $500 million which would value the company at, what, $5 billion. >> online dating. >> guys, the market has already said they don't think that's the right value. the stock is only up about 3% right now, which would put the value of that stake at about 140-ish million, 150-ish million. so exciting, though, this was a real unicorn that ioc had incubated. a 10% stake got picked up by a
venture capital, who is an excellent investor. they goss it through a services firm, and iop wants to own more of this high growth social dating stock. >> this is the portfolio approach, if you will, they're amassing brands, ones that could have value down the line. if you look at this, john jon, how much is this expected to enhance the overall from value for iac? >> well, iac has always been a conglomerate and dating is one of their stronger, they have match.com. great blat has now taken care of that, this gives them a leg up. valuing this at $5 billion iac is only valued at 5.8 billion, but remember tinder has no revenue, either. so it's a big risky move, i think. >> thank you, jon stein berg.
do not spend that tax refund, the government might take it all back over a statement it made when paying your parents. and why one company is actually paying workers to take this job and shove is it. first, what's coming up on "closing bell"? >> as you know, mandy, another day, another sell-off. is it time to run for the hills, or will you be kicking yourself if you don't buy back into this market? >> we have a pair of stock picker standing by with some of the beaten-down names. we're also going to talk about whether next week's tax deadline is fueling some of the red here on what es. and also speaking to tim sloan. he's actually going to be changing jobs seen. we'll find out what's behind a huge decline in home lending at what is the nation's largest mortgage originator. bill's back. all that and more at the top of the hour. "closing bell." we'll see you there. tdd# 1-888-628-2419 searching for trade ideas that spark your curiosity tdd# 1-888-628-2419 can take you in many directions. tdd# 1-888-628-2419 you read this. watch that.
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about h.h.s. secretary kathleen sebelius and obamacare, even as he announced her resignation. was it as genuine. many in the administration are still furious about the way she botched the roll-out. john harwood was there and joins us live. you know how these things generally go. i guess you can't have expected nothing lest. >> i think he was trying to sweeten her departure, but everyone knows the president was not happy, and really no one yaw happy with the way the website was rolled out. she was the responsible officer of the government. the president didn't want to make a change during the middle of the cries. they got through the period with reasonable success. they achieved an even better the congressional budget office target for what they expected to
encontrol, but the president wanted to make a change. the midterm elections are coming up. the democrats want to turn the corner, and sylvia matthews bur well about as bulletproof a nominee as the democrats could come up with, is the way they have chosen to try to do that. >> let me quickly ask, why do you think, if there was so much fervor, you know, against sell beality that it took long for something to actually happen with her job position. >> because i think for political and substantive reasons, the administration didn't want to get into a change of personnel right in the middle of that. first of all, you have to get somebody new confirmed. you don't want to add to the turbulence that they were already experiencing. and second of all, they needed to get through this enrollment period and they didn't want to feed the story line of their critics that the entire effort was in disarray.
it was in disarray, clearly, but they wanted to get peace it before the president made a change. >> sit tight, john. we have some breaking news with phil lebeau. on capitol hill, the house energy and commerce committee has just released documents regarding the general motors recall investigation, and these documents apparently at this point, according to reuters, gmc ceo who has said in the mast mary barra said she had no idea about the recall issue, but according to the documents, maria barra received an e-mail in 2011, discussing steering problems in troubled gm models that were later recalled. and she received an e-mail discussing these models that were later recalled. those are the documents that just been released by the house energy and commerce committee. we'll certainly have an update as we look through them and see
what other developments we notice. >> and we can certainly see that general motors stock is down by 4.5%, losing steam even as we speak. this could potentially spell a lot of trouble, because it kind of implicates she knew more than she was originally letting on. >> right. the thing to keep in mind is exactly what did the e-mail say. that's one thing. or did the e-mail say, look, we have a recall, but we're not sure if it can be recalled. it's all in the context of what those e-mails say, because they have been clear from the beginning she did not know about the issue that led to the recall. >> phil, at some point, which do investors in this stock need to start raising the question of whether mary barra's job is in jeopardy or at issue? as we're just coming off a conversation with john harwood about sebelius rye signing, what
should we be thinking about? her relative hi new job here? >> first, we haven't heard a response from general motors. we certainly will put a call into them to see what they have to say, and the other thing to keep in mind, we need to look at the documents to see exactly what the e-mails said. i'm not excusing anything, but keep in mind, there will be lots of e-mails about a lot of products, and did this e-mail simply say there's some steering problems involving the cobalt, we think we have it controlled? or did it say something more where she said aha, we have a problem here, let's do something. you need to look at the gran lairity. i have yet to hear anybody suggest her job is in jeopardy. again, we neat to heard from general motors and certainly mary barra. >> phil, thank you so much with the latest there. you see what the shares are doing. it's not just the momentum names taking it on the chin lately
. it's off by about 1.4%. early back on the 6th of march, a 14-year high of 43. we'll keep an eye on the market for you. announcer: where can an investor be a name and not a number? ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: ranked highest in investor satisfaction with self-directed services by j.d. power and associates. a short word that's a tall order. up your game. up the ante.
welcome back. markets are at the lows of the day. the dow on this friday, down 143 point. the nasdaq is once again the scene of the crime, and it's really that's what we've been saying, because the nasdaq now is at its lows of the day, down almost 1.5%. going to be the third straight down week for the nasdaq, and it's many of those high-flying technology names that are sort of in the crosshairs today. look at amazon, for example. it's right around its lows of the year. $310. priceline is being leaned on today, down 2.25%. twitter, which trades just behind me that you're looking on your screen right now is down almost 4%. that stock, as you see on the chart there, has been a little bit volatile today but as the nasdaq has slid a little deeper
later in the day and so in fact, worsening market picture. >> and should very quickly mention the low volume environment with all of this. yesterday was low volume and today is low volume. monday and tuesday are probably going to be exceptionally low volume because of passover so that's worth keeping an eye on as well. >> good point. >> we've been talking about the slowdown in momentum stocks and not just high flyers taking it on the chin. now blue chips which are in bear market territory which means 20% or more to the downside. >> that's right. looking at the dow jones industrial average, that's big, big companies, they don't move that much, names like verezon, maybe at&t, ibm, coca-cola, have some negative returns over the past 12 months, but some other large-cap companies, specifically within the russell 1000 index that you know have already declined by massive amounts here and we have a handful just to highlight here. first of all, new mont mining, that stock is down 38% just from its recent highs. that was basically on april
10th, 2013, so a big move down here for those shares, then you look at some of the retailers, teen especially, abercrombie & fitch down from its high of may 22nd of last year, 26%, and american eagle down 46% from its high may 22nd of last year. a big move down there and weight watchers, down from its high, 57% from july of last year, so a huge move down for a very well-known name and then, of course, there ee's ariat pharmaceuticals, down 69% from its high back on december 11, 2013, so as we talk about some of these big names, the ones that investors are looking at in terms of their shopping list, some of the blue chip names in the dow but also ones that have gotten as beat up if not more than some of the other stocks and the question becomes whether or not you want to catch the
falling price of these stocks. >> where's the best place to put all your money with all the market moll tilt? let's bring in our guests from strategic wealth partners. welcome to you both. ed, i'll go to you first. the selling is intensifying here as the week comes to a close. where do you protect yourself? >> well, there's a lot of areas that go, but what we really like are companies that can do well, regardless of the market dynamics, and one name that we like that we own in the davidson equity income portfolio is johnson & skronson, and we like it not necessarily because we're defensive on equities. we think markets can move themselves higher, but it has to be commensurate with fundamentals and johns johnson & johnson, good fundamentals there, pays a nice dividend yield, 2.7%, diversified company. its pharma business is doing very well, a strong pipeline and the other thing we like about
johnson & johnson is they are doing good capital allocation. companies that are willing to divest noncar businesses such as abbott, pfizer, and johnson & johnson, they are number one or number two in 70% of their businesses, and where they are not they are willing to divest. >> and you said the key word dividend which is a word we're hearing a lot these days. mark, i understand you're looking for above average dividend plays, and you have three of them in your basket. >> exactly. one of the most devastating things that we see happen to client financial plans is when they are forced to sell stocks in the midst of a market pullback in order to generate income for their -- their retirement lifestyle, so the best way to mitigate that is to invest in good quality, high-dividend paying stocks so furthermore we want to look at valuation, and right now the sectors that have the most attractive valuations would be energy, financials and tech, so the stocks that we like in each of those sectors would be chevron, wells fargo and microsoft. they are all paying above average dividends, valuations
look very attractive on an individual and both a sector basis so we think that's really a good way to make sure that we can minimize risk even during the downturns. >> even though microsoft is like at a 14-year high, certainly some raised questions about their growth going forward even though a new ceo has breathed new life into the company. >> yeah, yeah. >> they are actually -- it looks like they are doing some pretty exciting thing right now. they don't seem to be the same old boring company of the last ten-plus years. they have a new ceo, you know, they are rolling out or they rolled out office for ipad. they look to be doing some pretty exciting things, and the valuations look attractive so, yeah, we do like them. >> very quickly, ed, how much longer is this weakness going to last? >> it's hard to say. i think we have to parse through the data as it comes our way through earnings season. going to be very interesting. one thing i'll say this is not a market where the tide lifts all boats. we had the big valuation move last year, you know. this -- this year and this earnings season we have to parse
through the winners from the losers. it's going to be very much fumtly based and it's going to basically day by day, report by report. >> no doubt this earnings season will be a little bit tricky because of the weather impact as well. ed and mark, thanks for joining us today. scotty. >> just to point out a couple of stocks in the seconds we have lost. celgene is a loser today. biogen, so the biotext are being very, very closely watched. jpmorgan off disappointing earnings, worst performer out of the dow. >> nasdaq has fallen down since march about 8%, and we're currently sitting just above the 4000 mark, the technicians out there, 4000 mark is very crucial. "closing bell" is next. have a great weekend, everybody.
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incites envy... ♪ ...and unleashes wrath. ♪ temptation comes in many heart-pounding forms. but only one letter. "f". the performance marque from lexus. welcome to "closing bell" on a friday that's been a rough week here for the market. i'm kelly evans here at the new york stock exchange where we are seeing a familiar pattern today. bill, we opened up looking okay and we've since moved down pretty steadily. the nasdaq, keep a pretty close eye on this up. it's at 4001. it may breach that 4000 level as the selling continues. >> i'm told it's not as bad as yesterday at this time. i'll have to take your word f